Hunt Manufacturing Company
Address:
230 South Broad Street
Philadelphia, Pennsylvania 19102
U.S.A.
Telephone: (215) 656-0300
Fax: (215) 875-5252
Statistics:
Public Company
Incorporated: 1899 as the C. Howard Hunt Pen Manufacturing Company
Employees: 1,871
Sales: $234.9 million
SICs: 3951 Pens & Mechanical Pencils; 3579 Office Machines, Not Elsewhere Classified; 2521 Wood Office Furniture; 2899 Chemical Preparations, Not Elsewhere Classified
Company History:
The Hunt Manufacturing Company is a leading producer and distributor of office supplies and arts and crafts products. The company started life making pens, and this one product grew into a line that includes more than 10,000 items. Owned and run by one family throughout almost all of its history, Hunt benefited from stability in its finances and management, which allowed it to embark upon a program of rapid expansion through acquisition of other companies in the late 1980s. Under this policy, the company's size has grown rapidly in the last decade.
Hunt traces its lineage to 1897, when the C. Howard Hunt Pen Manufacturing Company opened in Camden, New Jersey. Two years after this start, Hunt was turned over to new management and formally incorporated. In 1903, Hunt was purchased by George E. Bartol, whose family would retain control over the property throughout much of the twentieth century.
In 1915, Hunt introduced an innovative new product that would become a mainstay of its line: the Speedball ballpoint pen. This item marked the company's entry into the newly emerging ball-point pen market, which was rapidly replacing the market for traditional ink pens. Bartol passed on the chairmanship of Hunt to his son, George E. Bartol, Jr., in 1921. Under the leadership of the younger Bartol, Hunt made its first major acquisition in 1925, when the company purchased the Boston Pencil Sharpener Company.
Hunt continued to manufacture pens and pencil sharpeners throughout the Great Depression, when many other businesses failed, due to the essential nature of the products. In 1940, Hunt introduced pen points made of a non-stainless steel alloy, and this innovation helped the company to maintain its market share throughout the war years and the late 1940s. In 1957, a third generation of the Bartol family took the reins at Hunt, when George E. Bartol III became the company's president and chief executive officer.
Also that year, Hunt transferred its manufacturing operations from Camden, New Jersey, to Statesville, North Carolina. A second acquisition was made shortly thereafter, when the company purchased the Peterson Manufacturing Company, which produced parts for metal eyelets.
In 1962, the C. Howard Hunt Pen Manufacturing Company changed its name to the Hunt Manufacturing Company, reflecting the broadened scope of the company's activities. Also during this time, the company moved its headquarters from its long-time home in Camden to Philadelphia.
In the late 1960s, Hunt expanded its line of products from basic, functional office supplies to arts and crafts supplies as well. In 1966, the company bought the New Masters Company, which manufactured artists' paints. In addition, Hunt expanded its Statesville, North Carolina, manufacturing plant.
In 1969, George Bartol III took complete control of Hunt from his father, becoming chairman of the board. The following year, Hunt continued its move into the art supply field when it sought to acquire the Bienfang Paper Company, based in Metuchen, New Jersey. This company manufactured special papers for use by artists. The purchase was completed in 1971, the year that Hunt offered stock to the public for the first time. In 1972, Hunt purchased the Pariscraft line of arts and crafts supplies from Johnson & Johnson.
Hunt continued its aggressive move into the arts and crafts field during this time, adding the Art-Brite Chemical Company, also located in New Jersey, to its fold. Hunt's line of office products was enhanced as well, with the addition of Lit-Ning Industries. This company had operations in Florence, Kentucky, and Fresno, California, and Hunt paid around $2 million for the entire package.
In 1979, Hunt consolidated its operations, moving its Bienfang paper manufacturing activities to Statesville, North Carolina. With this transfer, Bienfang's operations became far more profitable, and by the end of the year, Hunt reported net income of $3.2 million, increasing its earnings for the eighth straight year since selling stock to the public.
In 1980, Hunt earned 55 percent of its sales, and two-thirds of its earnings, from the 2,000 different items it sold for use in an office environment. These products ranged in price from a 25 cent Bulldog paper clip, to a $250 computer workstation desk. Tools for arts and crafts contributed 38 percent of Hunt's sales and 30 percent of its earnings. The remainder of the company's returns was filled out by its metal stamping factory, which created parts for use in a wide variety of goods, including pens and pencils, lipsticks, fishing tackle, automobiles, and appliances.
Also in 1980, Hunt signed a contract with Conte S.A. of France, winning the right to become the sole American distributor of Conte's high-priced artists' charcoals and pastel pencils and crayons. Hunt finalized this agreement, which would make strong contributions to its bottom line, in August 1980.
As Hunt moved into the 1980s, the company continued its long streak of profitability, as demand for its staple items continued strong. In March 1981, Hunt paid $13.9 million for two properties previously owned by CBS Inc., the X-Acto company, which made hobby knives, and the House of Miniatures company, which sold dollhouse miniatures through the mails. Both were located in Long Island City, New York. At the time of this purchase, Hunt took on $15 million in debt, in order to increase its holding in the hobby and leisure products industry even further, since it believed that this market showed strong potential for growth. These expectations were met when revenues rose 31 percent, to reach $54 million over the first eight months of 1981.
"Ten years ago, we set sales and earnings growth objectives of 25 percent a year, and we haven't missed them by much," Hunt vice-president, treasurer, and secretary Rudolph M. Peins, Jr., told Barron's in late 1981. Although demand for Hunt's goods had softened somewhat during that time, the company looked to newly invigorated sales in its arts and crafts division for further growth. A new line of craft kits, first introduced by Hunt in 1980, proved popular, as customers snapped up the $30 sets for painting, calligraphy, silk-screening, and several other craft projects. The following year, the company added ten new kits, some priced as high as $40, and laid plans to add six more in 1982.
Hunt also profited from increased sales of a new line of office furniture. The company's CommuniCore computer and word-processing workstations came in 12 different types and sizes, and cost between $40 and $250. In addition, Hunt successfully marketed a number of computer accessories, including swivel stands and storage holders.
Despite the importance of Hunt's new product offerings, the company's most important item remained the pencil sharpener. "As long as there's one person in an office using a pencil, that office will need a pencil sharpener, so sales are more a function of the number of offices in operation than the number of pencils in use," Peins explained to Barron's.
By the end of 1982, Hunt's sales had reached $78 million, contributing $4.8 million in income. At this time, the company's long-time leader, George E. Bartol III, was nearing retirement. Although he had four children, none were interested in following in his footsteps and taking over the family business. In order to ensure an orderly transition in Hunt's management, Bartol recruited a successor from outside his family and set out to prepare him to assume leadership of the company. Bartol's designated heir was Ronald J. Naples, who assumed the title of chief executive in the early 1980s.
In April 1982, Bartol retired as Hunt's chairman, and the 37-year-old Naples became the company's vice-chairman, assuming day-to-day control of Hunt. The purpose of this transition was to make it possible for Hunt to undertake a spurt of rapid growth. "A 61-year-old man probably wouldn't be as effective in a company committed to that kind of growth as someone who is under 40," Bartol told Forbes. To symbolize his departure from intimate involvement with the affairs of the company, Bartol planned to move out of his large office at Hunt's company headquarters. "My role will be to provide advice and counsel. It's a tough role to play," Bartol noted.
Hunt's plan for rapid growth was based on further expansion in the market of peripheral equipment for computers. Demand for its main products, conventional office supplies, was not expected to exceed seven percent over the next decade, as many of Hunt's products had already saturated their markets. In addition, Hunt looked to rapid growth in the market for objects used during leisure time, such as the arts and crafts supplies Hunt produced. The company planned to expand its offerings in this area, primarily through further acquisitions of other companies.
In order to support further growth in Hunt's revenues, Bartol planned to liquidate some of his family's block of the company's stock, but not enough that an outside investor could threaten his ultimate control over the company. "We don't want management being sniped at by unfriendly acquirers if the company has a bad year because of investments or something beyond its control," Bartol asserted. Bartol's decision to retain his interest in Hunt, while relinquishing control over the company, reflected his confidence that his company was the soundest possible place to keep his money. "We are not going to sell because we don't think there's a better investment out there. This company's potential is terrific. We want to grow sales to $500 million and then maybe to $1 billion," he remarked in Forbes.
Toward that end, Hunt raised additional investment capital in 1983, when its stock began to be traded on the New York Stock Exchange. The company also divested its only branch that did not fall into the office products or arts and crafts fields: the Peterson Manufacturing Company. This property, which produced metal parts for other products, was sold in 1983.
The following year, Hunt made a move to expand its holdings in the computer supply field, when it offered $18 million for Innovative Concepts, a manufacturer of floppy disk parts, in August 1984. By September of that year, however, the deal had been called off. A month later, Hunt announced that it would seek immediate growth in its revenues not through this purchase, but through stepped up marketing efforts and new product introductions.
In April 1985, Hunt consolidated its operations further at its North Carolina manufacturing facility, when it moved its X-Acto operations to Statesville. Later that year, Hunt forged ahead with its quest for acquisitions, citing the need for sizable purchases to fuel its ambitious growth plans in a profile in Mergers magazine. In July 1985, the company announced that it would buy Bevis Custom Tables, a maker of low-priced office furniture based in Florence, Alabama, for $12 million. Hunt then changed that company's name to Bevis Custom Furniture. With the Bevis acquisition, Hunt doubled its sales of office products the following year, and the company was able to pay off more than half of the money it had borrowed to buy Bevis within 12 months. On July 30, 1985, Hunt also acquired Marketing Ventures Associates, Inc., for $1.1 million. With this move, the company brought the Executive Gallery, Inc., of Columbus, Ohio, into the Hunt corporate fold.
By the end of 1985, after a spurt of acquisitions, Hunt's revenues had surpassed $100 million for the first time. The following year, Hunt trimmed back its operations somewhat, selling off two divisions. Both the company's costly House of Miniatures mail-order operation and the Executive Gallery, Inc., purchased just the year before, were divested. The financial penalty Hunt paid for this move caused the company's earnings to drop for the first time in 18 years.
Also in 1986, Hunt augmented the product offerings of its Bienfang art papers unit, purchasing $5 million worth of machinery to manufacture half-inch foam board at its Statesville factory. With this equipment, the company was able to plate, heat treat, and die cast the foam boards, used for mounting art work and framing. "There's an art to manufacturing foam board," Peins explained to Barron's, adding that "It was a big step for us and there was a lot we had to teach ourselves."
In addition, Hunt strengthened its management team in 1986, appointing Robert B. Fritsch as chief operating officer. The following year, Fritsch became president and director of the board, and Naples took over Bartol's posts of chairman and CEO, as the company moved forward with its transfer of power from one generation to the next. By the end of 1986, Hunt's sales had risen to $136.7 million.
With its newly consolidated management structure, Hunt returned to the acquisitions track in 1987. At that time, the company expanded its product line by picking up the American and Canadian stapler product lines of Acco World Corporation for $13.4 million. By 1987, nearly 40 percent of the 10,000 items that the company offered had been introduced within the last five years. "If we're going to remain competitive, we've got to upgrade constantly," Peins told Barron's.
Hunt looked particularly to its expanded line of personal home computer workstations and modular mail rooms for further sales growth, as demand for these products grew rapidly. The company also hoped that the growing pool of retired people, driven by the aging of the baby boomers, would enhance demand for its leisure-time arts and crafts supplies.
Hunt also benefited in 1987 from the falling exchange rate of the dollar. This helped to push up sales of its products in foreign markets by nearly one-third; at the time, Hunt products were exported to 63 countries, including Canada, Japan, South America, and the Far East.
In the late 1980s, Hunt acquired the Data Products Division of the Amaray International Corporation for $5.4 million in cash, as well as three graphic arts businesses from Bunzl PLC for $37 million. The three companies--Seal Products, Inc., Ademco, Ltd., and parts of the Coated Specialties, Ltd. company--all marketed products for use in mounting and laminating artwork. Hunt also bought a distribution company in Germany.
As Hunt moved into the 1990s, it's search for suitable acquisitions with which to expand its business intensified. The company continued to add new products to its line, and in August 1993, it bought the Image Technologies Corporation, located in Cottage Grove, Wisconsin. By the end of 1993, Hunt's sales had grown to $256 million. With a nearly unblemished record of steady growth, and a strong financial footing, Hunt appeared to be assured of continued success as it moved into the late 1990s.
Principal Subsidiaries: Hunt Holdings, Inc.; Hunt X-Acto, Inc.; Bevis Custom Furniture, Inc.; Seal Products, Inc.; Hunt Europe, Limited (U.K.).
Further Reading:
Brown, Paul B., "The King Abdicates," Forbes, February 14, 1983, p. 88.
Gordon, Mitchell, "Hold Punchers to Pencil Sharpeners," Barron's, October 26, 1981, pp. 44, 49.
Leibowitz, David S., "Let's Hear It for Boring," Financial World, November 24, 1992, p. 84.
Werner, Thomas, "Crafty Acquisitor," Barron's, July 27, 1987. p. 37.
Source: International Directory of Company Histories, Vol. 12. St. James Press, 1996.
